If you are scratching your head wondering what the heck EPLI means, don’t worry, you aren’t alone. Many business owners aren’t aware they may be missing this crucial coverage.
EPLI or employment practices liability coverage protects you as an employer from the liability that comes along with having employees and obeying all of the appropriate laws as their employer.
While you may do your best to hire fairly and treat your employees properly, it doesn’t mean you won’t find yourself in a scenario where you or your company are accused of wrongdoing. The sad truth is suing an employer for discrimination based on age, race, gender, or several other protected factors is a regular occurrence in today’s culture. Finding yourself faced with such a lawsuit can cause severe financial damage to your company, even if you win the suit.
Many employers believe because they always treat employees fairly, never discriminate, and avoid any and all inappropriate actions in the workplace, they do not need this sort of coverage. However, that may not be enough to protect you from a lawsuit. Even with trying your best to keep your company a good place where employees feel that they are safe and treated right, errors can be made. One misunderstanding can put your company at significant risk.
Here are some of the common EPLI lawsuits we see.
Sexual Harassment
This can be verbal or physical. Other forms of sexual harassment include unwelcome jokes or innuendos, insults, name-calling, touching, and other unwanted physical contacts. As a business owner, you are responsible for the actions of all of your supervisors. Additionally, it’s your responsibility to prevent harassment in whatever way you can, or later on, you could be liable in a court of law.
Discrimination
If an employee or applicant is mistreated due to their race, skin color, nationality, sex, disability, religious preference, or age, this is considered discrimination. Suggesting preferred types of candidates for a job role that doesn’t involve professional attributes, pay disparities among candidates with the equal qualifications for the same job, or if you deny certain employees the rights of specific company tools or facilities can be seen as discrimination.
Wrongful Termination
Before terminating an employee, you have to be very careful not to violate any employee rights along the way. Even if your employees are employed on an at-will basis. Examples of wrongful termination include:
- Firing an employee after reporting their employer to a government agency.
- Firing an employee before a written/verbal contract ends.
- Firing an employee without giving warnings or trying to take corrective action first.
Wrongful Discipline
Employee discipline, such as coaching, verbal, and written warnings, is one of the most effective tools to improve employee performance. As well as protect your company from liability. However, if your company’s policy doesn’t protect your right to terminate at will, managers discipline employees inconsistently, or managers discipline employees for illegal reasons you could be headed for legal troubles.
For example, if your company disciplines employees for absences, make sure you are not inadvertently punishing employees for exercising their legal rights. If you discipline an employee for taking leave to which the employee is legally entitled, you are asking for problems.
The Takeaway
As we reach the end of the year, it’s important to review your business insurance to make sure that the coverages meet your current needs. To learn more about EPLI coverage or for a review of your current policy, contact the professionals at Paradiso Insurance at 860-684-5270. Our licensed insurance experts will be happy to answer any questions you have.
